mu BASICS A MODULAR RPPROAGH Ma Ray Balsa, 284 reproduced or distributed in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store, Inc. ll Rights Reserved. No part this Learning Device may be permission from Rex Book Store, Inc Is TEModule 7 Distributing Products Objectives: At the end of this module, students are expected to: 1. define product distribution; 2. differentiate wholesaling from retailing and identify their functions; 3. identify the distribution strategies used by companies; and illustrate the levels of distribution. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be permission from Rex Book Store, IncOne of the important decisions — that management faces is determining which marketing channel to use. Product distribution is a critical factor in the efficient distribution of products from the manufacturer to the final users of the products. The objective of any product distribution is to get the right quantity of goods at the right place and right time with the least possible cost. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store, Inc. ll Rights Reserved. No part this Learning Device may be permission from Rex Book Store, IncPhysical distribution of products and logistics deals with the same activities. These consist of materials handling, order processing, warehousing, transportation, and inventory. Logistics is concerned with materials management and_ physical distribution. Physical distribution links manufacturing and customers, while material management focuses on the link between the supplier and the manufacturing. istibuted in any form or by any means, or stored in a database retrieval system without prior Phiippine Copyight 2074 Rex Eook Sova, Ine Al Rights Reserved No parol tis Learning Device hay be 2 Rex BookStore, Ine REDistribution Channels Marketing intermediaries compose the distribution channel. They are people who serve as the link between the firm or manufacturer and the market. Some examples of intermediaries are sales agent, advertising agencies, wholesalers, and retailers. They perform tasks such as purchasing, storing, selling, and transporting products. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be permission from Rex Book Store, Inc Is TEWholesaling intermediaries are those that purchase products from manufacturers and sell these products to retailers and other industrial users. Retailers, on the other hand, are those that purchase products and resell them to final users or market for their own use. Retailing is the final stage in the channel of distribution. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be permission from Rex Book Store, IncPhysical distribution of products starts when there is order from customers. How to handle such order in terms of quantity, date of delivery, speed, price, and mode of transportation to use are the concerns of the distributors. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be permission from Rex Book Store, IncLevels of Channel Distribution 1. Zero-level Channel. From the manufacturer, products reach the market directly. This is also known as_ direct marketing. No marketing intermediaries or distributors are needed. 2. One-level Channel. Before products reach the market, products pass through marketing intermediaries either through the wholesalers or retailers. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be permission from Rex Book Store, Inc3. Two-level Channel. This consists of two channels of distribution where products pass through before reaching the end users. These channels are the wholesalers and retailers, respectively. 4. Three-level Channel. Products from the manufacturer pass through three middlemen or channels—the manufacturer’s — selling agent, to wholesaler, and to retailer before the products reach the market. Philippine Copyright 2014 Rex Book Store, Inc. ll Rights Reserved. No part this Learning Device may be reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior mission from Rex Book Store, IncDistribution Strategy Used by Companies 1. Intensive Distribution. Firms place products in as many outlets as possible, be it in supermarkets, department stores, convenience stores, hotels, and hospitals, among others. This makes the products accessible and available to all consumers anytime, anywhere. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be permission from Rex Book Store, Inc2. Selective Distribution. Products are distributed in a limited number of outlets. Companies develop close business relationship with selected channels. . Exclusive Distribution. \|n this type of distribution, an outlet is given exclusive rights to carry the manufacturer's products within a specific territory. This set-up is not convenient to the customers because they have to go to that particular outlet where products are distributed or being sold. Although in exclusive distribution, competition is less. Philippine Copyright 2014 Rex Book Store, Inc. ll Rights Reserved. No part this Learning Device may be reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior permission from Rex Book Store, Inc. _Wholesaling and Retailing Wholesaling involves transaction where products are sold for resale. The person involved in wholesaling is called the wholesaler. Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior permission from Rex Book Store, Inc raeOther functions of wholesalers are: 1. They buy in large quantities and break these into smaller numbers for resale to retailers. 2. They provide product knowledge to the retailers as they promote and sell the products. 3. They provide the manufacturer the necessary feedback or market information about his product. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be permission from Rex Book Store, Inc. They handle the storage of the products. 5. They carry the inventory of the manufacturer’s products. 6. They provide their own sales agents so that it helps the manufacturer with minimizing manpower cost. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be permission from Rex Book Store, IncRetailing is the process of selling products to the end users. Retailing is the last stage in the channel of distribution. The person involved in retailing is called the retailer. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be permission from Rex Book Store, IncRetailing is an important industry because: 1. It helps the economy by creating jobs or providing employment. 2. Majority of the market patronizes retail purchases. 3. It serves as_ links between the wholesalers’ products and the customers. 4. It sells products that end users can afford. 5. Retail stores are commonly accessible to the market. reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be permission from Rex Book Store, IncClassification of Retailers a. Self-service is the type used by sellers in convenience stores. b. Full-service stores offer more choices of specialty products providing more services to customers; thus, operating expenses are high which result in higher product price.c. Limited-service retailers carry more shopping goods; therefore, providing more sales assistance for customers who need information about a product. d. Personal-service retailers provide personalized service to consumers. Personal services and facilities given to the customer build up goodwill and increase the volume of sales, as well as profit. Philippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be reproduced or distrbuted in any form or by any means, or stored ina database retrieval system without prior permission from Rex Book Store, Inc f iPhilippine Copyright 2014 Rex Book Store Inc. All Rights Reserved. No part ofthis Learning Device may be reproduced or distributed in any form or by any means, or stored ina database retieval system without prior permission from Rex Book Store, Inc